Spurred on by
A pack of cigarettes that once cost five shekels ($1.35) now sells for eight ($2.07). Even so, the price hike would not make him give up cigarettes or even cut down. "This is not the right climate for taking such a decision," he said frowning.
Abdel-Rahman Abu Auda,
Cigarettes are not the only commodities affected by the Haniyeh government tax policy. The measure extends in particular to goods being smuggled through clandestine tunnels and whose prices have soared due to scarcity. Yet Haniyeh's deputy prime minister and minister of economy denies that the cigarette tax is new. Ziad Al-Zaza insists that his government has only "put into effect a decision taken by previous governments". He maintained that the government that was in place before the last legislative elections had imposed a 4.7 shekel tax on cigarettes. At the time, a pack sold at between 12 and 17 shekels, depending on the brand. Now, under the current circumstances, prices have dropped to a maximum of 10 shekels.
Some government sources claim that the cigarettes tax was intended to reduce the number of smokers in
Gamal Nassar, a member of the Hamas leadership in
But there is another side to the problem, which is that many companies and service providers, such as banks and telecommunication and cell phone companies, stopped paying taxes to the Haniyeh government. According to Nassar, 90 per cent of the government's income now comes from outside donations. He refused to disclose the sources of these donations or the means used to transfer the money into
Although Nassar said that serious efforts were in progress to overcome
According to economic affairs journalist Hamed Jad, Hamas's sources of finance abroad have not been affected, confirming that the problem resides in a lack of cash, for which reason senior government employees have still not received their February paychecks. In an interview with the Weekly, Jad held the government's recent decision to impose a fuel tax largely responsible for the liquidity crisis. He stated that this crisis did not stem from any drying up of sources of funding, but rather from dwindling channels for transferring funds. Tunnels and currency exchange bureaus were among the most important of such channels. However, the real source of the crisis, he said, was the Israeli Central Bank's decision to stop dealing with banks operating in
Gamal Arshid, 34, goes home via a detour that takes him through the side streets of Al-Nusairat Refugee Camp. His normal way home along the main street takes him by the grocers where for two months running he has been unable to pay the bill he owes. Arshid is one of thousands of government employees who have received only a part of their ordinary paychecks. In his case, this came to only 1,500 shekels ($300) of his usual 2,500 shekels ($500) a month. The money he managed to borrow is barely enough to support his six-member family. Not only are around 22,000 government employees in the same position, top administrators have not received any salary at all for the third month running.
The crisis has already had a major impact on many civil servants who fear that their current financial straits will continue. After having to postpone his wedding several times due to lack of sufficient funds, Khalil Shati, 25, persuaded his fiancé and her family to agree to major changes in their plans for the happy occasion. In order to cut back on expenses, they would hold the wedding banquet in the groom's home instead of in a banquet hall and they would cut down the number of guests to only a few relatives, neighbours and friends. For a society accustomed to large and lavish wedding feasts, such an arrangement is almost like no celebration at all, Khalil pointed out despondently.
The cash flow crisis has also aggravated the already stagnant commercial life in
Sometimes Alaa's neighbours are startled out of their sleep in the middle of the night by the sound of his knocking on the door of his home in central